DHCOG swings to profit in 2010 with $34m net

Dubai, April 28, 2011

Dubai Holding Commercial Operations Group (DHCOG), part of the ruler's personal business empire, returned to profit in 2010, posting a net of Dh127 million ($34.6 million), compared with a net loss of Dh23.5 billion in 2009.

DHCOG which is Dubai Holding's main unit, has three core business subsidiaries, namely, Jumeirah Group, Dubai Properties Group and Tecom Investments.

Ebitda for the year was Dh7.6 billion, a considerable improvement compared to Ebitda of Dh1.1 billion in 2009.

Operating profit was Dh6.5 billion for 2010, against an operating loss of Dh0.02 billion in 2009.

Jumeirah saw a sizeable improvement in both operating and net profit in 2010. Net profits increased by 58 per cent, while operating profits increased by 30 per cent.

DPG revenues increased by 175 per cent as a result of an increase in land and property handovers. The overall occupancy levels increased to an average of 72 per cent following the launch of new communities such as Shorooq, Ghoorob and Layan. These levels are almost double than those recorded in 2009.

Tecom’s 2010 revenues of Dh1.8 billion, excluding the telecom portfolio revenues, were mainly driven by its recurring rental income from its business parks, where lease rates held up strongly in comparison with the wider commercial real estate market in Dubai.

The largest contributors to revenues in 2010 were the business parks, providing 85 Ebitda of total revenues, thanks to resilient occupancy rates. In 2010, Tecom’s Emirates International Telecommunications (EIT) telecom subsidiary produced strong results. Both Tunisie Telecom and GO delivered substantial dividends to shareholders with GO achieving higher revenues due to a 36 per cent increase in its TV subscribers. du’s market share grew significantly to 40 per cent, translating to an increase in revenues of 32 per cent.

“DHCOG’s strong performance in 2010 is a result of the turnaround strategy implemented in response to the changing business environment. This strategy was based on the realignment of the businesses, focusing on sustainable revenues and core competencies of each subsidiary, and streamlining operations and cost base,” stated Ahmed Bin Byat, chief executive officer of Dubai Holding.

In 2011 DHCOG will actively engage with the market, repay its upcoming bond maturity, and continue to focus on reducing exposure to non-core assets, he added.

Jumeirah’s ambitious global diversification strategy will accelerate with hotels and resorts forecast to be open or under development in the next two years, with a minimum of six coming to market in 2011. Meanwhile, additional operational and cost strategies implemented by Tecom will bring further long term benefits during 2011, he said.

And DPG will continue to leverage its leasing portfolio and deliver further projects in 2011, including the Built to Sell community Remraam, Bay Avenue, a retail destination at The Executive Towers, The Beach Club at Jumeirah Beach Residence and a further phase of the Villa project.-TradeArabia News Service